Nordstrom Exiting Canada

Nordstrom Inc. (Seattle) said it plans to shutter its Canadian operations, which consist of six Nordstrom department stores and seven Nordstrom Racks. The luxury retailer made that announcement in its fourth quarter and full fiscal-year earnings results.

“We regularly review every aspect of our business to make sure that we are set up for success,” said CEO Erik Nordstrom. “We entered Canada in 2014 with a plan to build and sustain a long-term business there. Despite our best efforts, we do not see a realistic path to profitability for the Canadian business.”

Nordstrom thanked the unit’s 2500 employees for their efforts. “This decision will simplify our structure, intensify focus on our growth and profitability goals and position us to create greater value for our shareholders,” he said.

Accordingly, Nordstrom Canada has obtained an Initial Order from the Ontario Superior Court of Justice under the Companies’ Creditors Arrangement Act (“CCAA”) to facilitate the wind-down in an orderly fashion.

The company expects to report $300 million to $350 million in pre-tax charges related to the closure in the first quarter of fiscal 2023. The move is also expected to result in a $400 million decline in total net sales and a $35 million improvement in total earnings before interest and taxes (EBIT) in fiscal 2023, as compared to fiscal 2022. The stores are expected to close by June.

As for its latest financial results, Nordstrom reported net earnings of $119 million, or $0.74 per diluted share, and EBIT of $187 million, or 4.5 percent of sales, for the quarter ended Jan. 28, 2023.

For the fiscal year ended the same date, net earnings were $245 million and diluted EPS was $1.51, with EBIT of $465 million, or 3.1 percent of sales.